Delinquencies ticked up across most loan categories in the fourth quarter last year with some of the greatest increases in auto loan categories, the American Bankers Association said this week.
The association characterized the picture as mixed in its latest Consumer Credit Delinquency Bulletin, as delinquencies rose in all eight closed-end categories and fell in all three open-end categories from the previous quarter.
“We’ve seen a slow rise in closed-end delinquencies over the last two quarters driven by small increases in auto delinquencies,” James Chessen, the ABA’s chief economist, said in a statement. “Across all categories, delinquency levels have remained relatively low due to solid job growth, rising income and consumers’ continued efforts to manage their finances carefully.”
Delinquencies in indirect auto loans rose 13 basis points to 1.75 percent of all accounts, remaining below their 15-year average of 2.22 percent. Direct auto loan delinquencies rose 7 basis points to 0.94 percent of all accounts, remaining well under their 15-year average of 1.63 percent.
Mobile home delinquencies rose from 3.11 percent to 4.07 percent, and personal loan delinquencies rose from 1.46 to 1.56 percent.
The overall composite ratio, which tracks delinquencies in all of those closed-end loan categories, rose 10 basis points to 1.51 percent of all accounts, though the association said this was still well below the 15-year average of 2.19 percent.
Delinquencies in bank cards fell 5 basis points to 2.69 percent of all accounts, staying below their 15-year average of 3.66 percent.
Delinquencies fell in one home-related category and rose modestly in the other two. Home equity line of credit delinquencies fell 10 basis points to 1.06 percent of all accounts and are now below their 15-year average of 1.15 percent. Home equity loan delinquencies edged up 2 basis points to 2.61 percent of all accounts, holding under their 15-year average of 2.85 percent. Property improvement loan delinquencies rose 4 basis points to 0.98 percent of all accounts.
Chessen expressed optimism that home-related delinquencies would continue to improve along with the housing market and that an improving economy would stabilize delinquency levels “for the foreseeable future.”
“Job growth across a wide swath of industries – from services to manufacturing to high tech – is the key to maintaining low and stable delinquency rates,” he said. “Lower taxes and infrastructure spending would add fuel to the economic expansion, pushing wages higher and helping to ease consumers’ financial worries.”
